Through its strategic plan Impact 2020, Twin Cities Habitat is ramping up its Homeownership Program while facing rising development costs for land acquisition and construction materials. The partnership with Minnesota Housing gives Twin Cities Habitat access to a flexible, low-cost credit line, allowing the organization to be responsive to land and property acquisition opportunities in the very tight housing market.
Leadership at Twin Cities Habitat and Minnesota Housing have been negotiating the agreement for several months. Susan Haigh, who retired as Twin Cities Habitat’s President & CEO on June 1, was thrilled to finalize this partnership as her final contribution as the organization’s leader.
“Thanks to this new line of credit, we will have much needed flexibility to respond to market opportunities as they evolve,” explained Haigh. “I am excited that Habitat can look forward to a busy summer construction season ahead and for years to come.”
Minnesota has one of the widest racial gaps in homeownership in the country. Minnesota Housing sees the partnership as an investment in homeownership opportunities for communities of color. Roughly 90% of Twin Cities Habitat homebuyers are households of color. In comparison, 13% of homebuyers in Minnesota’s conventional mortgage market in 2017 were households of color.
“This partnership provides an essential ingredient for the Impact 2020 plan to double the number of households that Twin Cities Habitat can serve each year,” said Housing Commissioner Mary Tingerthal, “Historically, 90% of Habitat homebuyers are households of color, which makes this an important part of Minnesota Housing’s strategy to extend more homeownership opportunities to households of color and close Minnesota’s homeownership gap.”
Last month Minnesota Housing had the highest first mortgage production ever at more than $110 million, which created homeownership opportunities for 616 households statewide, more than a third of which were households of color.
“I’m thrilled by the vision and foresight of Susan Haigh and Commissioner Tingerthal,” said Chris Coleman, Twin Cities Habitat’s new CEO, who started on June 2. “The line of credit from Minnesota Housing, paired with financial commitments from Bremer and generous Twin Cities Habitat donors, will help multiply the impact, so hundreds more families will have the opportunity to purchase a home of their own.” Previously, Habitat partnered with an average of 50 families per year on homeownership. The Impact 2020 Plan will more than double that volume, to create more than 100 homeownership opportunities annually.
Impact 2020 was catalyzed by a historic partnership with Bremer Bank, which committed to buy Twin Cities Habitat’s mortgages at a below-market rate. The partnership is valued at more than $98 million. Philanthropic donations and public funding unlock the power of Bremer’s partnership and make Habitat’s mortgages affordable for families. Families pay their monthly fixed-interest mortgages to ensure more families can buy homes, too.
The strategic plan introduced new ways for families to achieve homeownership. In addition to buying homes built or rehabbed by Habitat, households now have the option to buy a home for sale on the open market using Habitat’s affordable mortgage, originated by a new wholly-owned subsidiary, TCHFH Lending, Inc.
Habitat has also increased its income eligibility limit to serve buyers earning up to 80% of area median income who lack other mortgage options. For example, now a family of five earning up to $73,450 may qualify to buy a home with Twin Cities Habitat. (See up-to-date Homeownership Program income guidelines.)
Minnesota Housing has been an enthusiastic partner and supporter of Twin Cities Habitat for many years. This revolving credit line is a creative, new approach for the agency to support Habitat’s creation of affordable housing in the Twin Cities metro area.
The agreement means Twin Cities Habitat can leverage philanthropic donations to maximize the impact in the community. Minnesota Housing’s commitment further supports the mortgage capital investment from Bremer Bank, which buys Habitat’s mortgages.
Twin Cities Habitat for Humanity
About Twin Cities Habitat for Humanity
Our mission is to eliminate poverty housing from the Twin Cities and to make decent, affordable shelter for all people a matter of conscience. Twin Cities Habitat is committed to building the quality of life, health, and economic prosperity of the region by producing, preserving, and advocating for affordable homeownership – because homes and families are the foundation of successful communities. Since 1985, more than 1,200 families have partnered with Twin Cities Habitat to achieve homeownership, building stability that multiplies for generations. Twin Cities Habitat is recognized as an Affiliate of Distinction and is one of the highest-regarded Habitat for Humanity affiliates nationwide. www.tchabitat.org.
About Minnesota Housing
Minnesota Housing collaborates with individuals, communities, and partners to create, preserve, and finance affordable housing. Find out more at mnhousing.gov. Follow us at facebook.com/minnesotahousing and on Twitter @mnhousing.